Tuesday, September 29, 2015

Return of the Bottom Feeders (part ongoing)

As Banks Retreat, Private Hedge Funds Buy Troubled Mortgages:

Private equity and hedge fund firms have bought more than 100,000 troubled mortgages at a discount from banks and federal housing agencies, emerging as aggressive liquidators for the remains of the mortgage crisis that erupted nearly a decade ago.

As the housing market nationwide recovers, this is a dark corner from which banks, stung by hefty penalties for bungling mortgage modifications and foreclosures, have retreated. Federal housing officials, for the most part, have welcomed the new financial players as being more nimble and creative than banks with terms for delinquent borrowers.

But the firms are now drawing fire. Housing advocates and lawyers for borrowers contend that the private equity firms and hedge funds are too quick to push homes into foreclosure and are even less helpful than the banks had been in negotiating loan modifications with borrowers. Federal and state lawmakers are taking up the issue, questioning why federal agencies are selling loans at a discount of as much as 30 percent to such firms.

One company has emerged as a lightning rod, criticized by housing advocates and lawyers for borrowers, but admired by investors: Lone Star Funds, a $60 billion private equity firm. In just a few years, Lone Star’s mortgage servicing firm, Caliber Home Loans, has grown from a bit player to a major force in the market for distressed mortgages.
Yay. Because if a "hedge fund" is involved in it, you can rest assured they have zero expertise in the area. 

Kind of like the hedge fund douche who buys pharmaceuticals for AIDS patients, children with kidney diseases, and so on, and then quadruples the price of their medications overnight. "It's all good, bruh!"
As of the end of August, Lone Star and Caliber had foreclosed on at least 1,500 of those formerly F.H.A.-guaranteed mortgages — or 9 percent of the pool, according to an analysis of the home addresses performed by RealtyTrac, a foreclosure tracking service. Many of the foreclosed homes are clustered in Florida, Ohio, New Jersey, California and Texas.

A majority of the homes foreclosed on by Caliber have been bought back by another Lone Star affiliate at either a trustee or sheriff’s auction. The private equity firm is looking to resell the homes, and many can be found on Zillow, an online real estate listing service.
Also, the Consumer Protection Agency has been filing vast number of lawsuits against these companies, and the courts have been ruling against these clowns in their zeal to foreclose on the distressed home owners. So at least, there's that. 

But watch out, folks. This is the same kind of bottom feeding criminal activity that went on in the run up to the housing bubble burst almost 10 years ago, which of course led the Great Recession and near total collapse of the world economy.

But hey, it's all good, bruh.

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